In this study, an optimized localization algorithm is proposed for a dual-Sagnac structure-based fiber optic distributed vibration sensing (DVS) system. Different from the previous localization algorithms, the spectrum peak ratio of the interference signals in the frequency domain is applied for localization calculation, and the localization accuracy is effectively improved for the interference signal with low Signal-Noise-Ratio (SNR). Besides, the proposed optimized algorithm can solve the difficult problem of multi-point vibration localization by employing a continuous low-coherence light source, which largely reduces the system cost. Meanwhile, multi-parameter including the frequency and amplitude of the vibration signal can be retrieved simultaneously except for the vibration position, which is not available for the traditional localization algorithm of the interferometric DVS system. Experimental results verify that the system with the proposed optimized algorithm can realize high-accuracy localization of single-point vibration, multi-point with single-frequency vibration, multi-point with multi-frequency vibration. The corresponding maximum localization errors are only 0.18%, 0.22%, and 0.36% respectively.